Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings Required: Compute the following financial data for this year: 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets This Year $ 98,000 61,500 36,500 % % % 10,400 13,900 24,300 12, 200 1,200 11,000 4,400 6,600 396 6,204 28,560 $ 34,764 Last Year $ 93,000 57,500 35,500 9,900 12,900 22,800 12,700 1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1,200 11,500 4,600 6,900 792 6,108 22,452 $ 28,560
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings Required: Compute the following financial data for this year: 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets This Year $ 98,000 61,500 36,500 % % % 10,400 13,900 24,300 12, 200 1,200 11,000 4,400 6,600 396 6,204 28,560 $ 34,764 Last Year $ 93,000 57,500 35,500 9,900 12,900 22,800 12,700 1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1,200 11,500 4,600 6,900 792 6,108 22,452 $ 28,560
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 14-5 (Algo) Financial Ratios for Assessing Profitability [LO14-5]
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below.
The company did not issue any new common stock during the year. A total of 990,000 shares of common stock were outstanding. The
interest rate on the bond payable was 12 % , the income tax rate was 40%, and the dividend per share of common stock was $0.75 last
year and $0.40 this year. The market value of the company's common stock at the end of this year was $28. All of the company's sales
are on account.
O
Show Transcribed Text
Assets
Current assets:
Cash
Accounts receivable, net
Inventory
Prepaid expenses
Total current assets
Property and equipment:
Land
Buildings and equipment, net
Total property and equipment
Total assets
Accounts payable
Accrued liabilities.
G
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable, short term
Total current liabilities
Long-term liabilities:
Bonds payable
Total liabilities
Stockholders' equity:
Common stock
Additional paid-in capital
Total paid-in capital
Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
S
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
This Year
$ 5,834
16,300
10,650
1,990
34,774
7,900
21,100
29,000
$63,774
$ 11,400
980
490
12,870
10,000
TITEL
22,870
990
5,150
6,140
34,764
40,904
$ 63,774
Last Year
$ 6,650
9,200
8,960
2,480
27,290
7,900
20,900
28,800
$ 56,090
$ 9,250
1,650
490
11,390
10,000
21,390
990
5,150
6,140
28,560
34,700
$ 56,090](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faaae2147-9264-47d1-984e-b2380e2f6ae6%2Fb31a9fb2-f7c2-46c4-b453-12df235fa42a%2Fwrqxsgl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 14-5 (Algo) Financial Ratios for Assessing Profitability [LO14-5]
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below.
The company did not issue any new common stock during the year. A total of 990,000 shares of common stock were outstanding. The
interest rate on the bond payable was 12 % , the income tax rate was 40%, and the dividend per share of common stock was $0.75 last
year and $0.40 this year. The market value of the company's common stock at the end of this year was $28. All of the company's sales
are on account.
O
Show Transcribed Text
Assets
Current assets:
Cash
Accounts receivable, net
Inventory
Prepaid expenses
Total current assets
Property and equipment:
Land
Buildings and equipment, net
Total property and equipment
Total assets
Accounts payable
Accrued liabilities.
G
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable, short term
Total current liabilities
Long-term liabilities:
Bonds payable
Total liabilities
Stockholders' equity:
Common stock
Additional paid-in capital
Total paid-in capital
Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
S
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
This Year
$ 5,834
16,300
10,650
1,990
34,774
7,900
21,100
29,000
$63,774
$ 11,400
980
490
12,870
10,000
TITEL
22,870
990
5,150
6,140
34,764
40,904
$ 63,774
Last Year
$ 6,650
9,200
8,960
2,480
27,290
7,900
20,900
28,800
$ 56,090
$ 9,250
1,650
490
11,390
10,000
21,390
990
5,150
6,140
28,560
34,700
$ 56,090
Transcribed Image Text:Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses
Administrative expenses
Total selling and administrative expenses
Net operating income
Interest expense
Net income before taxes
Income taxes
Net income
Dividends to common stockholders
Net income added to retained earnings
Beginning retained earnings
Ending retained earnings
Required:
Compute the following financial data for this year:
1. Gross margin percentage
2. Net profit margin percentage
3. Return on total assets
4. Return on equity
This Year
$ 98,000
61,500
36,500
%
%
%
%
10,400
13,900
24,300
12, 200
1,200
11,000
4,400
6,600
396
6,204
28,560
$ 34,764
Last Year
$ 93,000
57,500
35,500
9,900
12,900
22,800
12,700
1,200
1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
11,500
4,600
6,900
792
6,108
22,452
$ 28,560
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